FPIC Completes Private Placement of $15 Million in Securities

FPIC Insurance Group, Inc. based in Jacksonville, Fla., announced the completion of a $15 million private placement through a trust preferred securities offering. FTN Financial Capital Markets and Keefe Bruyette & Woods Inc. (FTN/KBW) acted as placement agents for the offering.

On April 25, 2003, FPIC entered into a placement agreement with FTN/KBW for the private placement of $15 million of trust preferred securities. The offering was completed May 15.

FPIC, through its wholly-owned statutory trust, along with other insurance and insurance holding company participants, issued trust preferred securities to the FTN/KBW investment pool, which in turn, issued its securities to institutional and accredited investors.

The net proceeds of the placement will be used to fully repay the term loan portion of FPIC’s credit facility (approximately $8.8 million), partially reduce its revolving credit facility (by approximately $1.3 million) and make a capital contribution (of up to $4.5 million) to FPIC’s insurance operations. A portion of the net proceeds will also be used to unwind or partially unwind hedge agreements related to the term loan and revolving credit facility. FPIC has secured from its bank lender group the necessary approvals and amendments to its credit facility to allow for the issuance of the trust preferred securities and such use of the proceeds.

On May 13, FPIC entered into a second placement agreement for the private placement of up to $5 million of 30 year floating rate trust preferred securities and $10 million in 30 year unsecured senior notes. Closing of this offering is also anticipated to occur during May 2003. Assuming this second offering is successfully completed, the net proceeds would primarily be used to further reduce FPIC’s revolving credit facility and partially unwind the related hedge agreement.